SEOUL • South Korean giant Samsung Electronics reported an 8 per cent fall in its second-quarter net profit yesterday and promised “flexible” pricing of its new flagship smartphone after less-than-stellar sales contributed to a slide in its mobile unit’s earnings.
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An average forecast from a Thomson Reuters I/B/E/S survey of 48 analysts compiled prior to Thursday’s results tips this year’s profit at 27.3 trillion won though several have lowered their expectations in recent months. It generated 2.8 trillion won operating income from the mobile business compared with 4.4 trillion won a year earlier. A robust performance at its semiconductor department helped narrow the overall profit decline.
CNET adds that Samsung hopes to improve its mobile business by adjusting the price of Galaxy S6 and S6 Edge, and offering new premium mid-range and low-end smartphone models.
The news comes as Samsung released details of its quarterly earnings for the period April-June, which showed that the company’s profits have dropped for the fifth successive quarter.
As in previous quarters, most of the pain came in the company’s once-highflying mobile unit.
The “increase in marketing expenses”, is an allusion to Samsung’s misjudgment of consumer response to its flagship smartphones. “There’s a possibility that the third-quarter sales price could slightly drop versus the second quarter“. Samsung intends to remedy this with its new Galaxy Tab A series and another “new product scheduled for later this year”. Samsung said it expects growth in the smartphone market to slow in the second half of the year, with only a small sequential increase in sales in Q3.
Market research firm IDC said that Samsung, although still the world’s largest maker of smartphones, was remarkably the only top five vendor to see a loss of market share, losing 3 percent points, putting it at 22 percent. “They brought out a unique phone, the S6 Edge, but its differentiation wasn’t valued versus the iPhone 6 or 6 Plus at similar prices”.
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The company has also been hit by problems in making the phone, according to reports from Bloomberg earlier this year.
